Oregon Bank takes ownership of hotel

June 10, 2013 10:22 am

Enterpriseâs Best Western Rama Inn closed last fall, reportedly just for the winter, but owners North Bend 7 LLC had defaulted on their loan in August. The hotel in now the property of Lewis and Clark Bank of Oregon City, and the bank is talking to potential buyers. (Katy Nesbitt/The Observer)

Enterprise Best Western hotel transfers ownership during public auction last week

ENTERPRISE — The Best Western Rama Inn became the property of Lewis and Clark Bank following a public auction last week at the Wallowa County Courthouse.

No one offered a bid for the hotel, so Paige Sulley, acting as an agent for the trustee, Laura J. Walker of the Portland law firm Cable Huston, opened the bidding at more than $1.1 million. With no bidders, the ownership of the bank was reverted to Lewis and Clark Bank of Oregon City, which held the mortgage for the hotel’s former owners, North Bend 7 LLC.

It was reported last fall that North Bend 7 was merely closing the Enterprise hotel for the winter season, which was an unprecedented move, but the reality is the corporation stopped making its monthly payments of $7,614.82 in August.

According to a “notice of default and election to sell” entered into the Wallowa County Clerk’s Office Jan. 9, monthly payments for August through December 2012 equaled $39,970.80 including late charges. Those fees along with the principal on the loan, accrued interest as of Dec. 31, 2012, and the foreclosure guarantee added up to more than $1.1 million.

Jeff Sumpter, CEO of Lewis and Clark Bank, said there are a couple of parties interested in buying the hotel, but until the bank had ownership, it couldn’t sell it.

“It was up to the owner (North Bend 7) to sell; the bank can’t sell it until it owns it,” Sumpter said.

Also at issue is approximately $100,000 worth of hotel property, including window unit air conditioners, furniture and televisions. Mona Williams, Wallowa County district attorney, said a lengthy investigation was completed by the Enterprise Police Department last fall, but no charges were filed.

“It’s a very convoluted and complicated case because we can’t say for certain who owned the items,” Williams said.

Enterprise Police Chief Wes Kilgore said since there were several owners involved in the LLC, it was difficult to determine who owned what personal property at the Best Western.

Sumpter said a civil case was pending in regards to the missing furnishings.

In recent weeks, the lighted Best Western signs along Highway 82 and directly in front of the hotel have been badly vandalized — they were apparently pulled down and left where they fell. Frank Spear, the hotel’s former maintenance manager, said all of the outdoor trash containers were removed as well.

Kilgore said the bank asked him to stop whoever it was from taking the signs, but at the time they were destroyed, North Bend 7 still technically owned the hotel, so he could not stop them.

Spear said he worked at the Best Western for seven years and was employed by the bank to keep an eye on it during the winter to make sure pipes didn’t freeze. Local contractor Troy Wellens worked on the fire sprinkler system.

Now, the owner of the hotel, Lewis and Clark Bank, has the title free and clear and is responsible for unpaid taxes. Other creditors, including the U.S. Small Business Administration, will not be compensated, said Mark Ellingson, the bank’s vice president.

The hotel formerly employed as many as 11 people seasonally, Spear said, and is Wallowa County’s largest hotel with 53 rooms.

Michele Young, Enterprise city administrator, said the Best Western accounted for $17,000 a year of the city’s motel tax revenue, nearly half of the total budget. Motel tax funds are granted to organizations such as the city ice rink and Wallowa Resources’ Watershed Festival.

“We had to make a lot of cuts because we have no idea what is going to happen there,” Young said. “We won’t know if it will be a full 50 percent loss until we get through the summer, but we are expecting the worst.”

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